Question
7. Zero Ltd uses a standard cost system. Indirect costs were budgeted at $210,000 plus $15 per direct labour hour. The overhead rate is based
7. Zero Ltd uses a standard cost system. Indirect costs were budgeted at $210,000 plus $15 per direct labour hour. The overhead rate is based on 10,000 hours. Actual results were: Standard direct labour hours 9,000 Actual direct labour hours 10,000 Fixed overhead $190,000 Variable overhead $185,000 The fixed overhead budget variance was:
a. $20,000 U b. $20,000 F c. $10,000 F d. $10,000 U
8. Efficiency measures, such as number of new products developed, may be more useful than financial measures in:
a. Discretionary cost centres. b. Revenue centres. c. Profit centres. d. Investment centres.
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